Bloomberg News

Shell, Total Buy Gasoline; ICE Gasoil in Contango: Oil Products

February 27, 2012

Royal Dutch Shell Plc and Total SA bought European gasoline barges at the highest price in nine months. Gasoil for March delivery moved into contango, or a discount to the next month, for the first time since Feb. 3 on the ICE Futures Europe exchange in London.

Five ships were scheduled or provisionally chartered to carry naphtha from Europe to Asia in February, reports from shipbrokers including New Delhi-based Interocean Shipping said.

Light Products

Gasoline (MOGEEURB) for immediate loading in Amsterdam-Rotterdam- Antwerp traded from $1,094 to $1,095 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That’s the highest price since May 11 and compares with deals from $1,091 to $1,095 on Feb. 24.

Gunvor Group Ltd. and Chevron Corp. sold the Eurobob grade, to which ethanol is added to make the finished fuel.

The product’s crack, or premium to Brent crude, rose to $7.73 a barrel, according to data from PVM Oil Associates Ltd., a London-based crude and fuel broker. That compares with $7.61 a barrel on Feb. 24.

European companies shipped five cargoes, or about 400,000 tons, of naphtha to Asia this month. That’s more than the 160,000 tons forecast by traders and shipbrokers in a Bloomberg News survey on Feb. 16.

Naphtha’s discount to Brent was little changed at $5.57 a barrel, PVM data showed.

Middle Distillates

March gasoil dropped $1.25 to $1,029.50 a ton on the ICE exchange as of 1:37 p.m. London time. The contract fell after reaching a nine-month high on Feb. 23.

Gasoil for April delivery was at $1,030.25 a ton, valuing the March contract at 75 cents a ton discount. A market in contango signals excess supply or declining demand.

The fuel’s crack, a measure of refining profitability, dropped to $14.01 a barrel from $14.54 at 16:30 p.m. London time on Feb. 24. Front-month Brent fell 1.1 percent to $124.12 a barrel on the ICE exchange.

To contact the reporter on this story: Rupert Rowling at rrowling@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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